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4 smart ways to use your tax refund

By Jana Angeles | 04 June 2019

Tax time is amongst us, and it’s the perfect time to think about how you’ll use your tax refund. You may be itching for another holiday, or have the desire to learn a new set of skills that come with a qualification. 

Either way, when you get that extra “bonus” money into your account, it’s important to realise that it only happens once a year. 

Perhaps you missed out on a tax refund because you owed more tax than what was deducted from your paycheck, or you spent your last refund on an emergency car repair. Now that this year is different, you may have the luxury of choosing what to spend your tax refund on.

What Australians spend their tax refund on 

According to a poll run in 2015 by ASIC MoneySmart, this is what some of their users spent their tax refund on:
  • Bills (29%)
  • Savings (21%)
  • Loan or credit card payments (13%)
  • Received no refund (16%)
  • Home loan payments (9%)
  • Holiday (5%)
  • Other things e.g education, car rego (5%)
  • Household appliances (2%)
However, ran a survey last year with 2,003 taxpayers participating and the results came out that 46% would put their refunds straight into savings instead. 

As you can see, the spending habits of Australians change over time depending on the current economy. It may also be a generational thing where there is a growth in millennials still bunking in at home with their parents while they put money towards a house deposit, saving costs on rent in some major Australian cities.

If you’re still deciding what you should do once you make that yearly visit to the accountant (or online), here are some excellent ways you can spend your tax refund on:

Money-smart uses for your tax refund

  1. Invest in your education.
  2. Boost your savings.
  3. Travel.
  4. Start your own business or side hustle.

1. Invest in your education.

invest in education concept

You may have been eyeing on a particular course at Upskilled and love the added benefits of studying online. If you want to move up the ranks in your career, or simply have the passion for learning, investing in your education is a great way to spend your tax refund. 

Not only will you have the opportunity to upskill, a qualification can improve your employment prospects and can even give you the added benefit of feeling a great sense of accomplishment when completing a course.

Did you know that Upskilled provides a discount of 15% when you pay your course fees upfront? You won’t have to worry about adding in another repayment schedule in your bills, and you’ll have plenty of courses to choose from in IT, business or community services.

Since you can undertake the qualifications online, it can help you juggle study with work and other personal commitments.

Investing in your education gives your life a sense of purpose and direction, especially if you’re itching for a career change. Either way, you'll potentially get a Return of Investment (ROI) with studying as it can help open up doors for you.

2. Boost your savings.

saving concept

Your savings account may be on the low and needs a bit of a top up, or you probably don’t have any savings to put towards emergencies for that matter. It’s a good idea to put your tax refund in a High Interest Savings Account (HISA) because not only is it a low-risk investment, you get to see your money grow with bonus interest being added month-on-month (depending on your bank). 

In some cases, you will have a variable rate of up to 3% in a HISA and this could mean seeing more money come through your account. Boosting your savings not only gives you financial security, but it also helps you manage your finances better. 

In addition, a tax refund can kickstart the momentum you need when picking up good saving habits. This helps you make empowering decisions on money, spending less on useless things and saving more.

In fact, you may be in your 20s wanting to give your super a boost too. Not only is it a clever way to use your refund, but compound interest gets better with time, making your ROI in savings even larger.

3. Travel domestically.

travel concept

If it’s been a while since you’ve actually taken a break from your job and you’re experiencing some of the symptoms of burnout, you may need to book yourself a trip somewhere and explore the horizons of something that is unfamiliar.

Sometimes we need to shake things up in life and move away from the comfort of routine, and travel to a place we’ve never set foot before.

Receiving a tax refund is not only a great incentive to book travel plans with your family or friends, spending your money on experiences could actually make you a happier person.

4. Start your own business or side hustle.

woman designer looking at potential colour schemes

Have a passion project you’d like to invest more in? While it’s hard work, sometimes having a project on the side is worthwhile. You may have been thinking about turning it into a full-fledged business but don’t have money to spend on the resources to grow its hidden potential.

With your tax refund money, you can choose to invest in your side hustle and have some kick-start money for your business. It can be tough to start and grow your own business but if you’re smart when it comes to your tax refund, you can use it sparingly and be knowledgeable about a start-up’s non-negotiable expenses.

You may want to start a business but don’t feel comfortable running one unless you have the skills needed to be good at it. Upskilled offers an online course in small business: BSB42618 - Certificate IV in New Small Business. Doing this course can help develop the skills needed to manage budgets, develop work priorities and assist in marketing a small business.

The ROI in starting your own business doesn’t come without its risks but if you’re strategic enough, your tax refund money could be the reason for its starting success.

Want a larger ROI on your tax refund?

Investing in online education is a great way to make the most of your tax refund. With the flexibility of online study, you can study anywhere at any time.

Upskilled has plenty of courses to choose. You can read some of the success stories where past students have either felt “job-ready” when completing a course, or how further study has helped them progress into a better job.

If you’re ready to study and are keen to spend your tax refund on a qualification that can provide meaning and purpose, start your course search and contact one of Upskilled’s friendly education consultants today. 

This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances. 
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